California Land Use Legislation for 2012 that Could Benefit Renewable Energy Projects

As California’s public policy makers continue to demand greater and greater use of renewable energy resources, solar energy is still hot and wind energy is still cool.  With all the attention given to renewable energy, one might think that California law would make it easy to develop renewable energy projects.  One would be wrong. 

Like any other development project, a sponsor of something other than a rooftop solar installation faces a multitude of permitting challenges.  While the path to a successful project is still fraught with risk, recent legislation is intended to ease the process for some types of projects.  The following briefly examines a few of the legislative initiatives that could help renewable energy developers bring their projects to market.

Senate Bill 618

The California Williamson Act is a long standing law that uses contractual deed restrictions and favorable property tax treatments to preserve agricultural lands for agricultural use.  As utility scale solar projects require significant amounts of land, conflicts have developed between the Williamson Act’s limitations and the state’s renewable energy goals.  In fact, uncertainty abounds as to whether state law allows development of a solar energy project on a property otherwise encumbered with a Williamson Act contract. 

Senate Bill 618 attempts to balance the competing goals of agricultural preservation and renewable energy development.  Generally speaking, Williamson Act contracts restrict a property’s use for a rolling 10 year period.  Under existing law, it is often difficult and costly to cancel a Williamson Act contract early because of the findings a city or county must make and the state mandated cancellation fee.  Senate Bill 618 establishes a new process for cancellations if the land owner substitutes a solar use easement on that owner’s property for the Williamson Act contract. 

While clearly a step in the right direction, meaningful costs and uncertainty will still exist under the new law.  For example, both the State Department of Conservation and the State Department of Food and Agricultural (the agencies charged with protecting agricultural resources) are given considerable discretion over the new cancellation process.  As a result, only Williamson Act lands that clearly have little to no agricultural value will gain much certainty.  Further, while the Williamson Act cancellation fee is reduced by Senate Bill 618 from 13.5% to 6.25% of the land’s fair market value, the legislation contemplates other costs such as security for eventually returning a property back to agricultural use.  Nonetheless, for the right project on the right property, solar energy developers should keep Senate Bill 618 in mind.

Senate Bill 226

Buried in legislation addressing a range of amendments to the California Environmental Quality Act (CEQA), State Senator Simitian’s bill includes benefits for some types of solar energy projects.  The first element exempts certain rooftop and parking lot solar installations from CEQA.  To qualify, a developer must locate the solar energy system on the roof of an existing building or a parking lot that has been in continuous use for vehicle parking for at least 2 years.  Subject to certain restrictions, some of which protect existing trees and others that exclude projects that trigger the need for state and federal permits due to impacts to sensitive resources, the exemption also applies to other required project equipment that is both on the same parcel and that occupies less than 500 square feet.

A second component of SB 226 recognizes that technological challenges and changing economics have doomed some proposals to build utility scale solar thermal projects.  The new legislation gives the California Energy Commission (CEC) temporary authority to approve certain photovoltaic (PV) projects that would otherwise be subject to a local agency approval process.  Specifically, the legislation potentially applies to solar thermal projects previously certified by the CEC that now wish to transition to PV.  In evaluating the request for the amended certification, the CEC must conduct supplemental environmental analysis, provide an opportunity for public comment and hold at least one public hearing.  While the exemption only applies to a limited number of projects and projects must file the amendment request prior to June 30, 2012, the benefits of bypassing the local agency permitting process are potentially huge. 

Senate Bill 267

State Senator Rubio authored SB 267, a bill that should ease the permitting process for larger renewable energy projects.  Generally, industrial type projects over 40 acres that trigger CEQA must obtain a water supply assessment that includes a detailed analysis of the available supply and anticipated demand fo